While states are continuing to see modest progress in their struggle to dig out from the 2008 recession, the era of chronic budget instability and wholesale service cuts appears to have ended, according to a report released Tuesday by the National Association of State Budget Officers. The rate of revenue growth in 2014, however, is expected to be significantly lower than in 2013, the report said.
Of particular concern to budget officers was a falloff in the taxes that states are projected to collect this fiscal year, said the executive director of the association, Scott Pattison. Growth is expected to be essentially flat — 0.8 percent — in the 2014 fiscal year, which started in October, compared with an estimated 5.7 percent increase a year before.
One reason for the smaller growth was a one-time surge of revenue in 2013 due to changes in federal tax laws that led some individuals, particularly the most wealthy, to sell assets before Jan. 1, 2013, to avoid higher rates for capital gains and dividends.
(Read more: Lawmakers announce compromise budget deal)